In 2011, Lender Processing Services was part of a massive settlement with the government over industry-wide foreclosure misconduct that occurred after the housing crash.

That settlement stemmed from document missteps in the third-party foreclosure process at some very large banks and mortgage servicers in the aftermath of the subprime crisis.

The settlement also included names like Bank of America, JPMorgan Chase, Wells Fargo, and Citigroup.

Sponsor Content

While those names stuck around, LPS eventually disappeared. LPS’ former parent, Fidelity National Financial, bought up the company and merged it with another subsidiary, ServiceLink Holdings, and formed Black Knight Financial Services.

On Tuesday, the ghost of LPS came back to haunt ServiceLink and Black Knight, as the Federal Reserve, Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corp. announced that they are fining ServiceLink $65 million for the “improper actions” of LPS that contributed to that 2011 settlement.

A release from the government agencies is scant on details that led to the fine.

The penalty assessed by the three federal banking agencies--the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency--against ServiceLink Holdings satisfied the document review provision of the previous enforcement action.

The accompanying consent order, which can be read here, references the history of LPS, and how the terms of the original consent order transferred as LPS changed hands and eventually merged.

The new consent order states that on Jan. 17, 2017, the board of managers of ServiceLink authorized the company’s chief compliance officer, Paul Perez, to enter into the amended consent order and agree to the fine.

The agencies say that LPS will send the $65 million fine to the Department of the Treasury.

The agencies also say that they will continue to monitor the ServiceLink’s compliance with other provisions of the original and amended consent order.

HousingWire attempted to contact Fidelity National, ServiceLink, and Black Knight for comment on the fine.

A Black Knight spokesperson said that the company "is not a party to the agreement and is not responsible for paying any portion of the fine."

This article will be updated should one of the other companies respond.

Ben Lane is the Editor for HousingWire. In this role, he helps set a leading pace for news coverage spanning the issues driving the U.S. housing economy and helps guide HousingWire's overall direction. Previously, he worked for TownSquareBuzz, a hyper-local news service. He is a graduate of University of North Texas.

Commentary

With the recent turnover in leadership at the Federal Housing Finance Agency, we may be standing at the precipice of great change in the government’s role in supporting the mortgage market through Fannie Mae and Freddie Mac.